China Corporate and Investment Banking Awards 2019: Citic Securities
China’s Best Securities House
To say that Citic Securities is an indisputable leader among Chinese securities houses is not an overstatement. Serving more than 8,000 clients, including over 1,600 listed companies, the investment banking business headed by Ma Yao is well-established and highly reputable. With 1,100 bankers based out of 13 domestic offices, the brokerage serves a full range of clients from state-owned enterprises to private companies and local government financing platforms.
Also a winner for our best securities house for domestic equity capital markets award, Citic Securities raised Rmb217 billion ($31 billion) for issuers in 57 equity and equity-linked transactions, a volume that was 64% higher than the second-placed firm during our awards period between June 1, 2018 and May 31, 2019, according to Wind. The transactions varied in types from IPOs to follow-ons (in both shares and assets), preference shares, convertible bonds and exchange bonds.
|Ma Yao, Citics Securities
Citic’s DCM business did just as well, ranking ahead in the domestic bond market with a total volume of Rmb909 billion during our awards period and a 5.06% market share, Wind data shows. The leader in local government bonds and financial bonds, Citic also excels in asset-backed securities in both quantity and quality; it was involved in ground-breaking transactions such as China’s first securitization of logistic real estate investment trusts for Alibaba-backed network, Cainiao.
It is also one of the few Chinese securities houses capable of underwriting panda bonds, and was a joint lead underwriter for the Rmb3 billion BMW Finance NV Private Placement Note Series 1, a rare panda deal that was not issued by a red-chip company. The deal, also made available to foreign investors, marked the first time that a foreign company had used a guarantee structure in a panda issuance.
In the current Chinese market where default rates are on the rise, the firm strengthened its internal risk control process, and underwrote almost Rmb361 billion of triple-A-rated bonds in 2018, the highest among its peers.
Citic is a power house in both domestic and cross-border M&A advisory. The Citic team has more than 60 M&A bankers working with the firm’s strategic partners, including Evercore Partners, BTG Pactual, Haywood Securities and Jennings Capital.
The brokerage was the finance adviser for home appliances manufacturer Midea Group in its high-profile merger with washing machine-maker Wuxi Little Swan, by way of share issuance to the latter’s existing shareholders.
In the case of Cofco Property’s Rmb14.45 billion acquisition of Hong Kong-listed Joy City Property, Citic had to navigate the different regulatory and legal frameworks in both the A-share and H-share markets, including a surprising rejection from the China Securities Regulatory Commission – one of the seven different regulators that needed to greenlight the deal – in October before it was approved two months later. The deal saw Cofco become the first A-share listed company to acquire a controlling interest in a red-chip company via a share swap.
A similarly complex transaction involving two listed companies was Shenzhen Chinwan Wharf Holdings’ purchase of a 38.72% equity stake in Hong Kong-based China Merchants Port Holdings for Rmb24.65 billion, a deal that drew plenty of attention due to China Merchants Port’s market position.
Working closely with the corporate finance and capital markets teams at CLSA, Citic also worked for Chinese companies such as Ant Financial, Xiaomi Corp and Lenovo to tap the international markets via equity, debt and M&A deals.